Steinhoff International has sold its UK furniture retailing business to Alteri Investors’ new retail fund as it strives to cut debt, the Financial Times reported. The stores Bensons for Beds, Harveys Furniture and upholstery and bedding manufacturers Relyon have been owned by the troubled South African conglomerate since 2005 but have struggled recently as UK consumers turn more cautious about big-ticket items. In the year to September 2017, the last period for which accounts are available, Bensons and Harveys made a combined operating loss of £28m on sales of £566m.
The South African government signaled it’s going to take a hardline approach to its cash-strapped national airline as labor unions prepared to strike over pay and job cuts, forcing the carrier to cancel almost all its flights over the next two days, Bloomberg News reported. “If some tough decisions need to be made, we’ll make them,” Public Enterprises Minister Pravin Gordhan said in a speech at a conference in New York Thursday.
South Africa’s post office is cutting several hundred jobs, the second state-owned company in as many days to detail plans to lay off workers as the government looks to slash its wage bill, Bloomberg News reported. Finance Minister Tito Mboweni signaled last month he’s intent on lowering the government’s payroll costs, which consume 35% of national spending. The cuts are part of a plan to defend the nation’s last remaining investment-grade credit rating, which has a negative outlook.
Telkom SA SOC Ltd. offered to buy Cell C Pty Ltd. and combine South Africa’s two smallest mobile network operators to better compete against larger rivals, according to people familiar with the matter, Bloomberg News reported. The bid includes a plan to reduce Cell C’s debt and renegotiate contracts with suppliers, the people said, asking not to be identified because negotiations are ongoing. Telkom wants to take over the management of Cell C’s business, they said. The approach comes as Cell C explores options with MTN Group Ltd.
Ghana has too much power and gas, and that’s a bad thing for government finances. With capacity that’s almost double the country’s peak demand needs, Ghana’s electricity utility has to pay independent producers about $450 million every year for energy that it doesn’t need or use, Bloomberg News reported. This adds to the sector’s liabilities, which are the biggest debt threat to a nation that seven months ago completed its 16th bailout program with the International Monetary Fund.
South African Airways, the beleaguered state-owned airline that’s reliant on government financial support to continue operating, has started a restructuring process that could see its workforce cut by almost a fifth, Bloomberg News reported. As required by South African law, the carrier has started talks with labor unions about its plans, which could affect 944 of its 5,149 employees, SAA said in an emailed statement. The proposed restructuring includes all SAA divisions and departments, excluding its Mango Airlines, Air Chefs and SAA Technical units, it said.
Investors in frontier-market bonds are on course to get their best returns in seven years. It looks like it’ll be a lot tougher in 2020, Bloomberg News reported. Some of the biggest money managers are already becoming more selective. BNP Paribas Asset Management, which oversees almost $500 billion in assets, is sticking to countries with sound fiscal management such as Ivory Coast, or those with investment-grade ratings like Kazakhstan, Uruguay and Morocco. Aberdeen Standard Investments sees opportunities to get above-market returns by buying the bonds of Sri Lanka, Ecuador and Ghana.
Bribe allegations leveled in court against a VTB Group executive may complicate the Russian state-owned bank’s attempts to recoup a $535 million loan that’s part of a major debt scandal in Mozambique, Bloomberg News reported. A New York court heard testimony last month that the VTB executive in charge of the deal, Makram Abboud, took $2 million in kickbacks. The bank denies the allegations, made by a former Credit Suisse Group AG banker at a criminal trial in which VTB isn’t a party, and its employee hasn’t been charged with any wrongdoing.
Some investors are getting out of Eskom Holdings SOC Ltd. dollar bonds amid concern South Africa is taking too long to implement a turnaround plan and explain what it will do about the utility’s $30 billion of debt, Yahoo Finance reported. Yields on the struggling power company’s dollar bonds due 2025 climbed to a one-month high on Wednesday, even though the government’s 138 billion rand ($9.3 billion) bailout has bought it some time to reorganize its finances.
Cities across South Africa are due to host parades for the country’s rugby team in coming days, following last weekend’s emphatic victory in the World Cup final in Japan. In financial markets, too, there were scenes of celebration on Monday after Moody’s elected not to downgrade the country’s debt to junk, the Financial Times reported.